BOSTON (Legal Newsline) – The Department of Justice has announced that RehabCare will pay $125 million to resolve allegations that it violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims for unnecessary services.

Kindred Healthcare Inc., a Louisville-based company, bought RehabCare Group Inc. and Rehab Care Group East Inc. in 2011. The two now operate under the name RehabCare as a division of Kindred, making the business group the largest provider of therapy in the nation. RehabCare contracts with more than 1,000 SNFs in 44 states to provide rehabilitation therapy. According to the allegations, RehabCare caused these SNFs to submit claims to Medicare for rehabilitation services that were not reasonable or necessary, or that never even occurred.

“Medicare beneficiaries are entitled to receive care that is dictated by their clinical needs rather than the fiscal interests of health care providers,” Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said. “All providers, whether contractors or direct billers of taxpayer-funded federal health care programs, will be held accountable when their actions cause false claims for unnecessary services.”

The settlement illustrates the government’s continual combat against health care fraud. The Civil Division’s commercial litigation branch handled the case, with support from the U.S. Attorney’s Office for the District of Massachusetts, the U.S. Department of Health and Human Services Office of Inspector General and the FBI.

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